City Council - Special Meeting

Thank you. Thank you.

I'd like to welcome everybody to a special workshop meeting of the Boca Raton City Council related to our budget. The date is June 18th, 2026. The time is now 1.30 in the PM. I'd ask everybody to please rise and stand for the Pledge of Allegiance. I pledge allegiance to the flag of the United States of America and to the Republic for which it stands, one nation, under God, indivisible, with liberty and justice for all. Thank you. Ms. Siddons, could you please do the roll?

Mayor Thompson.

I am here.

Deputy Mayor Grau. Here. Council Member Drucker. Here. Council Member Perlman.

Here.

Council Member Sippel. Present. All present.

excellent we're here today to discuss the fiscal year 2026 2027 budget and i would ask the city manager if he could please introduce the staff person who will be making the presentation today thank you mr mayor and good afternoon before i turn it over to our deputy city manager and cfo mr zervas and the in the finance team i'd like to take a few moments to discuss the purpose of today's workshop

where we are in the budget process first of all no decisions are required today this workshop is intended to provide council with an early overview of the proposal fiscal year 26-27 budget discuss key assumptions and priorities and provide an opportunity for questions and discussion we are intentionally bringing the workshop forward earlier than many local governments By starting the conversation now, we've got additional time to review the budget together, receive council feedback, evaluate potential adjustments, and ensure there are no surprises as we move forward later in September to adoption. For our newer council members, today's workshop is also intended to provide an insight into the city's budget development process. The budget is developed over many months and reflects extensive work by our departments, their directors, financial staff, executive leadership. While budgets are often viewed as financial documents, they are really policy documents that reflect council priorities and determine how resources are allocated to deliver services to our residents. Today's workshop is intended to help Council understand not only where the City finances stand today, but also the service demands, operational needs, and long-term investments that shape the budget. As you will see today, the City remains in a strong financial position. Staff continues to focus on maintaining high service levels, investing in critical infrastructure, and supporting public safety, and preserving the City's long-standing commitment to fiscal responsibility. in addition to council being able to present their own questions that they prepared toward the end of the presentation I would encourage questions throughout the presentation today's workshop is intended to be interactive and this is the appropriate time to discuss assumptions priorities challenges and opportunities before we move into the formal adoption process Before I turn it over to Mr. Zervas and the finance department, our department directors and staff across the organization, they put a significant amount of time and effort that goes into developing this particular budget a lot of months in advance. It required a lot of coordination, as you can imagine. Throughout the whole entire organization. So I know there's a lot of information particularly to the new council members But again, don't hesitate to ask questions and really today is the goal today is really to to start a conversation about our budget and our priorities and it's not Necessarily to make a decision today. So with that I'm going to turn it over to our deputy city manager and CFO Mr. Zervas

Thank you. And just for a quick additional introduction here. So Sharon McGuire is our director of Office and Budget Management. Mike Middleman is is our deputy director. Mike's actually going to be doing the presentation for you today, and I'm going to be adding some context. And all three of us are here to really answer questions from the city council and the public. I want to echo a couple of comments that city manager Sohani made just in kind of where we're at in the process. So I've been doing this work for the city for about three years now, three budget cycles. And and this is by far the soonest that we've come to the city council to discuss matters like this. Last year, you may recall, we came to you in July. The budget, just as a reminder, the budget has to be adopted before the end of the fiscal year, which is September 30th. And there's two public hearings that are required. So we typically do that in September. There are some millage rate calculations and some assessment calculations that have to go to the county. in order for them to prepare the trim notices which are noticed to our to our constituents here or all of our property owners that has to be done in july so typically we would be coming forth in july to give an update on the budget in preparation for adoption in september We backed it up a little bit this year and started earlier, really anticipating having a new city council to work with, wanting to make sure that we were aligned in our focus on the budget development process with the desire of the city council. And so we wanted to make sure we had plenty of time to get any feedback that you may have in this process ahead of having to prepare those documents for the county in July. and then be ready to come back in September with a thoughtful and complete budget package for your consideration. So that's setting the context a little bit just to let you know we are about a month ahead of schedule. it coincidentally kind of falls in line with property tax reform that wasn't the intent when we set the budget date that's just when the special session moved forward and and uh you know triggered the the legislation that you know i did a report to your council on last week so this is not in response to property tax reform property tax reform if approved by the voters WON'T IMPACT THE CITY'S BUDGET UNTIL THE FOLLOWING FISCAL YEAR. SO IT DOESN'T IMPACT THIS FISCAL YEAR. THAT WOULD BE 07-08 AND THEN 08-09. SO JUST KIND OF LETTING YOU KNOW THE PLAN WHEN WE TALK ABOUT HOW TO RESPOND TO IF THAT legislation is passed by voters and is implemented we do have time to consider policy direction on and how we address that and i laid out several options for you at the last council meeting so kind of big picture that's where we're at we're ahead of schedule is what i'm trying to tell you we we're intentionally ahead of schedule in order to have plenty of time to work with all of you through this process and I'm gonna go ahead and well and I should add because we're ahead of schedule some of the information we have is less than perfect right we're dealing with a projected or an estimated property tax roll as an example the county hasn't completed that process yet why because they do they they'll have that to us in early July and we wanted to get ahead of it so we have estimates from the county but they're not final numbers and so that impacts things like the fire fund calculation property tax revenues and So there's some things that because we're early, it's it's a little less than perfect. But I think we have a very complete picture of the city's finances and the budget. We're well positioned going into this year. And so just keep that in mind because we've brought it to you sooner than normal. And so with that, I'm going to go ahead and turn it over to Mr. Middleman to present the presentation.

Great. Thank you. We thought we'd kick things off by looking at our proposed FY26-27 total millage rate compared to the current millage rate in FY25-26. We are proposing no increase to the operating millage, keeping it at 3.6476. And the debt service millage is decreasing by 0.001 for an overall decrease of 0.001. What this means for a home with a taxable value of $450,000, so that we think of that as a $500,000 assessed value with a $50,000 exemption, would pay $1,648.76 in taxes to the city, or roughly $138 per month. We also wanted to take a moment to talk about the rollback rate because there is legislation that we expect to become law in SB4F that would change the calculation here. So first, what is a rollback rate? It is essentially the millage rate that we would need to have to collect the same amount of ad valorem taxes in the proposed budget year as we are collecting in the current year. So these calculations come from our office. They are preliminary. They're based on our understanding of SB4F. And we calculate the rollback rate to be 3.5548. The thing that is changing in the proposed legislation is the adjustment factor that would adjust the maximum millage that would be allowed by a majority vote based on per capita Florida personal income. So in this calculation, they're removing that. So the factor would be one. So that means that the maximum millage rate allowed to be approved by a majority vote would be the rollback rate, 3.5548. The amount that would be allowed for the maximum millage requiring a two-thirds vote is 3.9103, which is 110% of that rollback rate. Again, the proposed millage rate that we're submitting today is, again, preliminary and is no change from FY26. It's 3.6473. And that's a 2.61% increase over the rollback rate. And then we also are showing what that means for aggregate taxes in the rollback rate versus the proposed rate. This slide shows our change in assessed valuation. This is based on the preliminary numbers from the county. We're looking at a $2.48 billion increase in assessed value, and that's about 6.19%. Of that, new construction is 1.43% of that increase, and the remainder is from reassessments.

May I ask one question?

I believe we have a question. Go ahead, Mr. Perlman.

So if we keep the rate stable and don't enact the rollback rate, what is the difference in tax revenue given the proposed increase in assessed values?

The difference in taxes relative to what we're proposing relative to the rollback rate? Is that what you're asking?

Yeah, assuming we move forward with the proposed millage rate in 2027, what would be the increased taxes taken in tax revenue to the city? The difference between the two years.

The total.

yeah i think we'll i think we'll get to that in subsequent slides and if it doesn't feel free to ask again and i will clarify that yeah because the so the rollback rate is based on um there's some adjustments to what the or the collection is so you don't include any of the new construction and there's there's some other adjustments so that's why it's not um The current year proposed rate. Actually, that is the amount, though. Yeah, there's 155.

Yeah, this is the total amount. We budget at about 96% of these amounts just because there is discounts that are provided to people who pay early up to 4%. So yeah, correct. And we use these taxes to fund in part both the general fund and our CIP fund.

All right, just to close the loop on that, is the second and third from the bottom lines here, that represents the difference? So it's about $4 million difference if we, okay. Thank you, keep going.

So I went over this slide already. So this is just a chart that shows the change in assessed valuation over the last 10 years, showing that we've had steady growth here that's allowed the city to maintain a low millage rate. And this shows for each of those same years, the amount of that assessed valuation is driven by new construction. That is highly variable. So this chart shows again the it's not exactly the valuation, but it's what where it becomes important for us, which is the actual property taxes received, the blue being operating taxes and the orange being the amount that we have put towards CIP relative to our expenditures in public safety and non-public safety. So you can see that, one, we do not collect enough ad valorem taxes to cover public safety expenses alone, nor have we over this time frame since 2008. And that although we've had steady growth in the property taxes received, Largely gone to increases in public safety. And and that is a large expense driver. But luckily, because we've had that growth, we again have not had to increase our millage rate for quite some time. This chart shows just by category general fund revenue sources comparing the current fiscal year approved budget to what we're proposing for FY27. This is a little over $21 million increase overall. This, I think, it's not exactly what you were asking, Mr. Perlman, but it does show the overall increase for the general fund ad valorem taxes on this chart. And we have that number on 96%. And then a similar chart by department for expenditures and general fund. Similarly, looking at around a $20 million increase, Part of this increase, and we'll give more detail on in future slides, is we are proposing to eliminate the beautification fund and roll that back into the general fund. And that is about $8.5 million shift the general fund. It's net neutral overall because we're moving the revenues and decreasing a transfer. Again, I'll go over that later. But that is part of why there's such a large increase between the two years. So those changes, the increase between FY26 and the FY27 proposed budget can be broken into several categories. So this would be for the general fund citywide. There's about a $3.2 million pressure from the compensation study that was implemented in the current year. Then we have another $6.48 million from COLA and STEP increases. just under a million dollars in pension increases. We are requesting about 3.9 million in new positions, which we'll give more detail on in subsequent slides. And then the organizational changes that I just mentioned, that's out to about six and a half million. And then to balance the budget, we've also had net budget reductions in other categories about 1.27 million.

I'm gonna Mike let me just make a couple comments on this slide I think this slide does a good job of summarizing the major changes between last year's and this year's budget we're gonna break this out by department so you can actually see how it affects each department because there's really not a 20 million dollar increase in the budget net new right it does increase but because of the shift of the beautification fund and that was an organizational restructuring under the city manager's guidance of moving that from recreation with a separate fund and folding it into the general fund that as a beautification fund it never fully funded itself um you'll see that it received an allocation of property taxes and revenues from the city but that would otherwise flow to the general fund it was unrestricted general fund revenue that wasn't enough to fully fund uh what was about eight million dollars in in uh or eight and a half million dollars in beautification costs either and the city's general fund historically has made a transfer to fully fund that operation so it's effectively really part of the general fund at that point so from our standpoint folding it into the general fund makes sense but it does make it look like the general fund's growing when in fact it's it's not it's just combining two functions the compensation study as mr middleman had mentioned those things are already approved and implemented for all general employees we are working on negotiations with seiu that number does include the impact from seiu so we're assuming that we're able to deliver that to seiu but they were already approved under the city council's and guidance and implemented so that's not a new ask really and colas and step increases I know you're all aware that we are currently in negotiations with all of our bargaining units. So we have put a factor into the budget in order to provide some room for negotiations. That's what that is. And for those of you that may not be familiar, the city does maintain a step system, but only for public safety. And what a step system is, is essentially that a pay range is broken up into steps, about 5% step in between each step. And employees, as they progress in their time in classification, they move from one step to the next step based on their tenure in their role. That is only applicable for police and fire, for public safety. everyone else we don't have a step system it's strictly the cola and that's so that's an estimate pension increases those are changes in the annual required contributions so it's not a discretionary increase we're not asking for more money those are required to fully fund our pension system and and i want to talk with you more about the net new positions in the slide when when we get there but really i want to point out that At the end of the day, we went through an extensive process to ask our departments to show us budget reductions for both a 5% and 10% level. Some of those reductions, what that process did in some respects is highlight areas where we could cut back now. uh why why wait and that's really what we did and so we did some of that exercise last year when we cut about two two and a half million dollars out we just got another 1.27 1.28 million dollars out of the budget this year as well just through that process itself so i hope that gives you a little context to this slide and i'll speak to kind of the breakdown by department in a few minutes So this is the breakdown by department. You can see, I know there's a lot of details on this slide. I apologize if it's difficult to read. I think it's very helpful because as things are reorganized functionally, it makes looking at the prior year and current year comparisons difficult to understand what those changes are. So we outlined all of these changes in the column. So the first column shows the general fund by department. um and then we see the 2025 six approved that is this year's approved budget and next year's proposed budget the one we're looking at today and what that difference is that difference overall is about 7.74 you see that on the on the bottom line going from 256 million to 276 million now that 19.8 million dollar increase there are all those factors are now broken down in the in the following columns to the right so the things we just talked about the comp study at 3.2 million dollars you can see how that which has already been implemented you can see where how that impacts each department colon step increases the same pension and those net new positions um those net new positions are in fire and we'll talk about that in just a minute but i wanted to break this down to show you at a department level you know where these where these costs are being incurred the next grade columns are all net zero these are reorganizational changes so these are things that are just shifting between different funds or departments and they're they're impacting that that that current year to next year difference column but they aren't new investments these are just existing reorganizations so we have beautification moving from recreation to public works and engineering we have ocean rescue moving from recreation services to fire rescue emergency management moving from the city manager's office to fire rescue park rangers moving from recreation services to police services and then finally we have public affairs where we're we are moving some of the public affair functions both from the i.t internal service fund and from the recreation services fund into the city manager's department again those are just shifts those aren't new requests and then on the far right column you see a breakdown of that 1.28 million dollar budget reduction by by department all right thank you

Then we have our statement of fund balance for the general fund. This budget being preliminary currently shows a net increase to the general fund of $180,900. We plan on submitting a balanced budget, but this was close enough given the preliminary numbers. A lot of the revenue numbers will change. And we thought it would be better to come in with a surplus than a deficit. Based on that fund balance that you see at the bottom, the bottom half of this shows how that fund balance is either restricted, committed, or unassigned in various categories that we have. We have $170,000 for Army Corps of Engineer Reserve. 10% of our expenditures would both go into where you see the 10% fund balance as well as another 10% for the Hurricane Disaster Emergency Reserve with an available fund balance of $34,471,900 while maintaining our committed and 10% fund balance reserves. So we mentioned new positions for the general fund. Um, and this is the breakdown for those. Um, so we have fire rescue are requesting to fully staff fire station number eight, um, which would be 12 firefighters for lieutenants and for EMS captains. And they're also requesting one vehicle technician. Uh, our office is also requesting a budget analyst really as part of a transition plan.

So let me go back to that last slide. Thank you. So I want to talk a little bit about these new positions. So the past three budget cycles that I've been here for this issue of fire station eight has come up. I've heard heard about it from the community. We've heard about it from our fire staff, heard about it from the chief, who every year is recommended from a public safety standpoint, staffing that station. Now, what does that mean? If you're not familiar, all of our fire stations have two pieces of equipment. They have a fire rescue, a fire apparatus and a rescue apparatus, for lack of better terms. And both are both have constant staffing, meaning that their staff available to operate both pieces of machinery for their intended purpose all the time, 24 seven, except station eight. Station 8 has two pieces of equipment and staffing to operate one piece of equipment. So this is when we talk about fully staffing Fire Station 8, it is bringing it up to the same staffing capability and level of service that all of our other fire stations currently have. Fire Station 8 is downtown, effectively, across from, well, it's off Hillsboro, Rio. It's by the park. I think you'll know where that is. So they respond primarily to that downtown area, but also the surrounding residential area adjacent to our downtown. So that has been a public safety need for quite a while. For financial purposes, we've deferred this ad for several years now. And it is now a recommendation that we're bringing forth to the council that it's time to fund this. That is an increased level of public safety service. That is an additional service that we're providing to the community. In addition to that, fire is asking for four EMS captains. And I'm not an expert in fire services, but we have two divisions, an east and a west division. We have an EMS division that operates kind of across the whole community, but they're only in one side east or west at any one time. The goal here is to have a dedicated EMS division on both sides east and west all the time. So when you see four staff, They're not all there at the same time. That just gets you one person all the time. That is constant staffing. So it gets you one EMS division in the east and the west all the time is what that adds to do. And that, again, increases the service level. So you're going to see in a minute a proposed adjustment to the fire fee, the non-Ad Valorem fire assessment fee. that is the proposal on how to pay for this increase in service level so this is about a 3.8 million dollar cost and we've calculated what what at least a preliminary estimate on what we think of fire rev fire non-avalon fire fee increase would take to fully fund this additional service level it is a recommendation both from a public safety standpoint and fiscally you know this would be the proposal on how we'd be able to deliver on that need to the community And so we'll be happy to answer any questions as it comes to that. But we'll be looking at the fire fee in a few minutes. Thank you.

Before we look at the fire fee. So that was the general fund new positions that we're requesting. We're also requesting some positions in other funds. That includes four police officers for the CRA totaling 1.12 million. And the focus of these would really be focusing on house population. And then also three new positions in our water and sewer operating fund. These are part of a package of positions that have been requested every year that we've been phasing in. And this is the last year of that phase in for these positions. This gets back to what Mr. Zervas was just talking about. Please, I want to make sure that people are aware that this is all very preliminary. We are in the process as of this morning, still working through the numbers with both the property appraiser and our consultant on this. But this is an example of what we're looking at for proposed fire assessment fee changes to collect additional revenue to to fully fund the fire station number eight positions that were just discussed. We'd be looking at an increase to the residential rate from $155 to $224. And also as part of the assessment that we're doing, or I should say part of the study that we did on this, we're looking at changing the way commercial and industrial are actually charged. Before we had categories based on square footage, and we would be replacing that with a flat amount per square foot. These, again, are preliminary numbers, but as we dial in the numbers, we'll be sure to share them with you as this table changes.

Thank you. I'd also like to point out, and this gets a little bit into the weeds, but as we update this study, and one of the things that we have to do is look at the equitable cost allocation of the total cost across these different categories. That's required under the law. And so as we've updated this fee, what we've looked at, and that's based on calls for service to the different types of classifications, residential, commercial, industrial. And what we're seeing is a shift of that cost away from commercial and more towards residential. So part of that increase of 155 to 224, part of that is the additional services that we just talked about. Part of it is also just a requirement under the law of distributing that based on calls for service. And so the result is if you do the math and you look at the different square footage calculations and those different fees, the commercial properties are actually paying less in many cases than what they're paying today. So a lot of our businesses would actually see a reduction. Um, again, these numbers aren't final. We are literally, we're working on them this morning. So, and we need that final tax roll in order to finalize any calculation. Um, but I think generally that's what we're seeing. We're seeing a shift of those costs to, to would take some of that burden away from the businesses, small businesses in particular. Um, and, um, um, and rebalancing that according to calls for service.

thank you so far we've been focusing mainly on general fund so now we're pivoting towards talk about the city over overall so the city-wide budget including the general fund we are proposing an 11.8 percent decrease over the fy26 approved budget and this shows revenues and and expenditures for both fy25 actuals fy26 approved and what we're proposing here for fy27 This is a table with those same time periods showing just the revenue sources by category. You can see that our operating revenues are up relative to FY26 approved by about $7 million citywide. But overall decreasing, and what that really is showing is we're decreasing transfers in. Overall transfers are down in our budget as well as the use of fund balance in what we're proposing. And then we have two slides on citywide expenditures. This looks at citywide expenditures over the same time periods broken out by category. And you could see, I think the question that would immediately pop up looking at these numbers is why are our approved budgets so much higher than our FY25 actuals? And the primary driver of that is timing on our capital, our CIP projects, because again, we're looking at citywide. So now we're not just looking at general fund, we're looking at all of our capital improvement funds are included in this. And we have ongoing timing where we need to put everything in the budget to encumber our capital projects. And due to timing of that, those end up getting rolled over to future years. So when we have the actuals come in on our financials, it shows that we're spending a lot less than we're budgeting. And then another way of looking at this breaks that out rather than by category, by department to show how those changes play out over the departments. And again, you'll see the large decreases tend to be in areas that you have a lot of your capital expenditures. that and that's the decreases on here just looking at a proof to approve and overall what's driving our decrease from last year is as our capital improvement budget is lower than what we had in the current year and our transfers out are also decreasing i do want to draw attention to that part of this we typically have around a five million dollar transfer to beautification that's going away as part of the bringing beautification into the general fund budget so that's partially driving that there's also overall most of the transfer decreases are in the water sewer funds And this kind of segues into talking about our capital improvements program. We did provide supplemental documents, including essentially project sheets for every single project that we are proposing in our capital improvements program for the FY27 to FY32 capital improvement program period. These numbers on this slide are just showing the capital improvement program requests for FY27 by department. And this is over $100 million less than last year, I believe. And so rather than walking through every single project, we did just pick essentially the most expensive FY27 projects to give a little bit more detail here. But of course, we did provide all those projects to you. So if you, when you were reviewing the materials, wanted to look at other projects, we are certainly happy to entertain that. So I'll just quickly go over the 12 projects that are shown here. First one is water sewer. This is an FY 27 ask of twenty five point eight three million for wastewater upgrades so replacement upgrade and expansion of our wastewater treatment facility to meet state and federal regulatory compliance and The next project is about $14 million for water treatment facility improvements. So this is rehabilitation of the lime softening water treatment facilities, membrane softening facility, and artillery equipment for FY26 and FY27. Again, these are just FY27 costs. If you look at the full plan, there are out-year costs for a lot of these projects. This next project is 12 million that we are putting in the budget for FY27 for downtown railroad pedestrian crossing evaluation and safety enhancement funded out of the CRA. The first part of this is really evaluate, but then there's also funding as a placeholder to actually start implementing things. The next one goes back to water sewer. You can see they have quite a few projects on our top list, just the scope of these projects. This would be for critical infrastructure improvement and improvements to water and sewer infrastructure throughout the city. This shows the neighborhoods that are on the docket for FY26 and FY27. And we have $10 million going for railroad crossings. And this is specifically for the Jeffrey Street Railroad crossing and closure of the 28th Street crossing. Let me go back for a second. Yeah, so this is funded because the funding source for this is our infrastructure surtax fund, and we have some federal grant funding as well. So that funding source lets you tell you. So anything that would have the five-year CIP as a funding source is essentially getting funded in part by ad valorem. And if it doesn't have that, then it's funded by another dedicated capital improvement fund. So here's an example of one that is funded out of our five-year capital improvement fund of $8 million. And this is a city services building. So this would be renovations of the building 6551 Commerce Boulevard. And this is really using leftover funds that were budgeted in the current year for the purchase of that building. essentially rebudgeting for the next year to cover this.

Mike, let me just, I want to reiterate that because it's an important point. The five-year capital improvement plan, the five-year capital improvement fund, the actual fund itself, has no dedicated revenue source that it generates. So it's not like water sewer that has, collects water sewer fees every month. It doesn't receive a specific tax. What we do is in the budget process, we allocate a certain amount of property tax revenue that would otherwise go to the general fund into the five-year capital improvement fund. So when you talk about where do property taxes go, it's not just operations of city operations. It also goes to fund a large part of our general capital improvement program, so the non-utility programs. We do get other funding like the infrastructure surtax, as was just mentioned, for streets and roads and mobility projects. those general projects park improvements is a good example city services buildings public infrastructure you know a lot of that comes from property tax and that gets transferred even though it's going into this fund it's still unrestricted property tax revenue at its core and it goes to fund projects over the course of that project lifetime we may otherwise transfer money into that fund but that's really the the core revenue source ask a question about that sure mr perlman yeah thank you mr zervas

On the last year's book on the CIP program, the CIP fund was not present in the separation by funding source. Why was that not included? Do you plan to include where we could be looking at the a list of cip projects from that source in the upcoming book and then also um we met briefly discussing the cip fund and at in our discussion we spoke you called it somewhat of a pass-through fund so um however tax revenue does go directly into the fund and it is funded with a with an allocated portion of the tax of ad valorem taxes so can you just address those points

So the sources, the source of funding for capital projects, we want to identify the actual source of that funding. Like I said before, the CIP fund itself doesn't have a dedicated revenue source. So what is the fund, where is the money coming from? And I think typically what you'll see is a GFR designation, general fund revenue. I'm looking at my budget team, is that correct? That's correct. so and why do we do that because it actually is informative as to the actual source of the money funding that project so we wouldn't put we wouldn't put infrastructure or we wouldn't put five-year capital improvement program as a source of funds because it's not a source of funds it's really just it's a fund that's that's you're right it's a pass-through fund effectively getting funding from the general fund and then funding a project

For the five-year CIP projects, does all money pass through the CIP fund to fund those projects? And if not, what determines whether money passes through the CIP fund to fund a capital improvement project or not?

so no no they don't um the lots of our lots of our projects are funded directly from utilities as an example so a utility project would not roll through the five-year Capital Improvement Fund uh infrastructure surtax projects they probably wouldn't flow through that fund I'm going to defer to my team here as far as like other details so go ahead

So we have a whole CIP approved budget, which gets also approved in September. And in that budget, we show with summaries of the exact revenue sources and the projects. And we have all the detail on all of those projects. We have a few CIP funds. We have the general fund CIP. We have the infrastructure surtax, which is also basically a CIP fund. Now, that revenue source has dried up. It's sunsetted. We just have leftover revenues to be able to, or leftover funds to be able to fund a few more projects. We also have a beach renourishment, which is basically its own CIP fund. A lot of times utilities kind of has their own right now. I mean, they have an R&R fund, which some of their capital flows through. However, those are shown in the CIP book. the same way as any other enterprise fund has its own. There's funding that comes from Beach and Park District. So those are, they're actually shown on summaries in the CIP book but we didn't We didn't do a slide of those summaries, right, for today. Although we have that information based on all of the projects because, as Mr. Zervas said, every project, as we put it, it has a funding source. So sometimes we, you know, for something we think in the future, like the police, services building. We thought it might be funded by bond funding. We'd say we would identify that as a bond funding. The other source that we usually use is some utility service taxes, which is just about $2 million for the general fund and then for the general CIP. Did I answer your question? Sorry.

I would just add, and this might be a source of the confusion on this, is when we, in our CIP book, in those executive summaries that you'll see at the beginning of that book, we do refer to the CIP fund as the general fund because the main source of revenue is general fund revenue. So there isn't a CIP fund exact sum. It's called the general fund in the CIP book. We did want to make that a little bit more clear. This is how we are showing the fund sources. It's very clear that it's the five-year CIP. We talk about this every year, whether or not it makes more sense to call this out as CIP fund or as general fund revenue, because we do also want to make sure that people are clear that that fund source is the general fund. But so I can see why there'd be a little bit of confusion on that. We're trying to make it more clear every year.

We always strive for improvement. Mr. Drucker has a question. Go ahead.

Just more of a comment I think that we also have we all got like this preliminary proposed CIP which we get every year which really details they pick the top projects of priority but this really details and you know when we read through these at least you know I read through this stuff you kind of could see everything that's happening and it also allocates it by by kind of sections like exact where the actual code and by the way I'm not getting into each code. That is not my job. That is their job. So but it does have it here. And I believe this is public information. It's posted. So we kind of get this. And at the end, we'll have the final, final CIP project. And I usually I usually turn right to public works because that's the one that does all my transit mobility projects and funding, et cetera. And it kind of tells you exactly the year that the project is on, where the funding is coming, what changes we made, when is it going to start, when is it going to end? So for all of you that want some happy reading or informative reading on your own time or bathroom reading, I recommend that you pull this out and go through it like we do. Thank you. I just wanted to put that out there.

That's a great suggestion. Why don't we keep going?

All right. This is the number one priority project for Public Works, speaking of, and this is resident-led Memorial Park enhancements. We have $7.5 million budget for FY27 using our land proceeds fund. And this is really, uh, for enhancement, of course, civic buildings, specifically targeting city hall of the community center. Um, really the enhancement that we've been talking around Memorial park that we really want to have, uh, residents driving and informing this process. We do have in the out year for this a much larger dollar amount for the actual implementation. Um, and we have it as a placeholder for using bond proceeds for that amount.

yeah let me just comment on on this project in particular um this project i mean this is a this is a project obviously that is the council's highest priority we're moving forward with We don't yet know what the full details and scope of this is going to look like. And I think once in the $7.5 million allocation was really intended to get us through that process of defining this project, doing preliminary site work, preliminary design, better scoping the project, engineering, understanding kind of what this is. I can envision at that point, as we refine this with more precise information, actually splitting this into separate CIP projects so that we have one for the city hall facility, one for the recreation facility. And once we know those major elements, we'll be able to break this down into actually individual CIP projects. and identify specific funding sources for them. So although those this this year, we've allocated land use proceeds. So that is the fund that holds the proceeds from the sale of the old golf course had about $50 million in it at the end of last year. That's where that funding is coming from. The future funding is not determined yet. So although in the book it says bond proceeds, it's really a placeholder. We can call that something else, but we don't know yet. And the answer is um as to once we know for example how much of it is eligible for cra investment we can assign cra money how much is more parks and recreation we can assign the appropriate funding sources to so i would expect this project to mature over time and develop and be more specific and precise as we go through this year and really this dollar amount is intended to facilitate that process to get us to that point where we know what we're doing, we've got specific budgets for each project, we can set up specific CIPs for those and have those funding sources identified. So I hope that adds some context to this particular project.

Thank you.

Mr. Zervas, one question.

Mr. Perlman, you're recognized. Thank you, Mr. Thompson.

Just so I understand this correctly, are we saying that $7.5 million is going to be spent on this before any shovel hits the ground? Is that what this is saying?

no that's not what this is saying this is saying that there's a budget of seven and a half million dollars to fund the the planning the design the engineering to get us to that point um i i not saying that all of that would be spent before a shovel would hit the ground

Who came up with this number for $7.5 million for design and engineering?

Our public works and engineering department.

Okay. Because we know that for the police department, over $560,000 were spent with an architectural firm for plans that for this $190 million station, it's unclear whether these plans can be used or not. And residents across the city were were angered by the fact that the city had spent $560,000 on these plans now we're talking about potentially seven and a half million dollars on design and engineering plans prior to a shovel based on this indicating that seven and a half million is going to be spent before any construction commences Given what's happening with the property tax amendment and the need for budget analysis of budgets and reining in municipal spending, this $7.5 million number figure is outlandish. This is troubling.

Mayor Thompson?

Ms. Trucker?

Thank you, Mayor Thompson. So maybe I'm not hearing correctly. Maybe there's five people here, but you're listening. What you're hearing is different from what I'm hearing. That is not what we said. Mr. Zervas did not say that we were going to have to spend $7.5 million. What I heard was this is encompassing a lot of other projects, and at some point we're going to start splitting them out into their own projects and assessing those fees. Also, I want to re-clarify that we're no longer talking about a police station that's $190 million. It's really important as we go through this process that we have accurate data and the community understands factual data that comes from the members of this dais. So that's really important. So Mr. Service, for the third time, can you re-explain this amount for the audience and for those members listening at home?

Sure. I'm going to actually ask our public works and engineering director to come speak to the specifics of the scope behind the actual design and engineering of the proposed project.

All right. Good afternoon, Mayor and City Council. Zach Beard, your public works and engineering director. So yeah, when we're looking at the big picture of from what we've been hearing from the community and assessing Memorial Park in the downtown, we simply came up with a budget figure for elements and projects of the to Mr. Service's point, the tennis center, the historic buildings, which we estimated is probably 1.5, just baseline to to get renovated some of the other facilities the the government center and and the specific portions of the buildings to do an evaluation so from the perspective of a budgeting process that's a very early number to to begin but again I it's my understanding that council is pursuing an evaluation from the public getting input about what Memorial Park will look like so there's there's no There's no process to spend any money before there's an understanding of what Memorial Park's configuration is going to look like.

Thank you. Mr. Beer, when you came up, when you developed this number of $7.5 million for design and engineering and put this in the presentation today, in your mind and in the work of your department, what were some big numbers, some big ticket numbers that made up, that comprised that cost? Could you just walk us through that a little bit, please?

Mayor Thompson, before we proceed, I think I still had the floor because that was the question that I asked for Mr. Service who deferred to Mr. Beer. So I would like to finish my questioning before Mr. Perlman interjects.

If we don't mind, I am interested in hearing this answer too. I'm going to get to you. Don't worry. Can we just get the 7.5 number, the big ticket items, and then we're coming back to you. Mr. Rucker, go ahead.

Sure. So with the big ticket items, again, I think it's the elements at Memorial Park with the civic building. So that's City Hall, the community center. There is an open discussion about softball and the softball facilities at that site. there is a shuffleboard court that is very long in the tooth there's the historic buildings the tennis center all of those elements not to mention there's a substantial amount of utilities in the downtown that are quite aged so it it's a very high level number I think part of it too is This is a snapshot and I think it's really important for me to at least state from the city as we're required through the city processes to budget on a five-year time horizon. For this process, really zooming out for a second and identifying It's not just 2027. It's looking out over 27, 28, and then into the next five years is really, again, identifying it as the top priority for public works is really just a focus. And then even if we talk about cash flows and what it's going to cost by the time we go to construction and spend that money, we're evaluating that from a five-year plan, not just for this current fiscal year. So it's evaluating the possibilities what's going to happen on that site but because of the number of unknowns we're taking in a conservative budget approach very good miss trucker

And I think, thank you, Mayor Thompson, and I think you had, you alluded to some of the preliminary figures that we already have. For example, the Singing Pines, which is here in the description in the books that we got, by the way, and we got this presentation ahead of time as well, the council did. That was already assessed at about $1.5 million. And that's a big figure. It's a property that we all discussed in the last 18 months. A lot of the same book of movements around and around singing pine. So just that number would literally take away from this seven and a half million dollars. And I think you answered my other question, which is when you're projecting for futures, because this is a project that's not going to be a one year project. So I think we need to understand that as well. And I appreciate you explaining that.

And let me just add to that, that isn't it true? I can see it on the narrative here that part of that $7.5 million includes actual work being done, not simply planning and developing proposals for work, but actually the work itself to include and not limited to upgrading climate control technologies, improving ADA accessibility, et cetera, et cetera. So this does involve actual work being done on actual buildings and not simply planning or designing.

Is that right? That is correct. And I think it's one of those from the general project perspective. So right now, the consultant is working through the evaluation phase of the downtown civic buildings focusing on this area. And once we get that information back, that's going to help better inform things. But I think it's not going to be a surprise at this point from the preliminary information I hear back that there's an investment needed in those buildings. There are significant number of elements that need infrastructure. It was very painful and difficult to put the $1.4 million in to put the roof on City Hall, but we've made that investment. So far, I haven't heard anybody else identifying waterfalls coming down while they're trying to work. there's elements where planning it does seem like a big number but when you disperse it over the the 30 acres that is that area really that's the western portion of Second Avenue there's a lot of city infrastructure that's pretty long in the tooth so it was a it was a general estimate from budgeting purposes it is not there is no authorization at this time from City Council to spend this money very good let's wrap it up yeah last question

We know that some expensive companies could be coming forward in in this from these preliminary phases for example when when we when the city hires this consultant and possibly other other Professionals so in this number do you how do you see the breakdown more or less in percentage wise between work and preliminary consultants of the seven and a half million

Yeah, I don't have enough. Based on the development of the CIP, it's really just a high-level budget estimate. So I don't, staff doesn't have a breakdown of percentages at this time because we're still going through that needs process. I don't have that information.

All right, let's keep rolling.

Okay, thank you. Moving on, we also have $7 million in the FY27 budget for the municipal fleet garage and associated site work. This is the total for this. There's no out-year costs in this budget. And the funding source for this is split between Sanitation Fund and the Motor Pool Fund. Then we're jumping back to water sewer.

Meter reading technology improvement in the amount of $7 million.

This includes $1.6 million rebudgeted or left over from current year budget. Yeah, replacement installation of AMR devices on all meters. And we have $5 million for Spanish River underpass project. Flagging here, there is $4 million out of our CIP fund, as well as $1 million state grant fund. $4 million out of our general CIP fund for roof replacements, with FY27 being the 6500 building, so the building we're in right now, and the fire support Banyan Spanish River Library. And then the last one we're highlighting for you, again, we have the full book that has many more projects in it, is the police services facility. Kind of re-looking at this and having construction for FY27, the amount of $3 million to address that need. And that concludes the presentation we prepared for you. Hand it over to Mr. Zervas to go over our next steps here.

yeah we'd be we'd be happy to answer any questions from the council as I mentioned the process is that we would take any feedback we get from from you today and depending on what that feedback looks like either come back in with a subsequent meeting or we would go straight to the September budget workshops the public hearings and approval so yeah happy to answer any questions

OK great let me just say that at least to the members of the Council that staff is available all the time to answer questions on this I avail myself of that frequently so by all means you can ask them now, but just know between now and September to several months away we have plenty of time to get answers to questions that we may have. But if in the event people do have questions now we go down the line, I think we can start to my right miss ground to questions.

I just wanted to ask when was the last time that we raise the fire assessment fee.

no it was more more recent than that it was since I've been working here for four and a half years it happened I think either four years ago I think it is AT THAT POINT IN TIME, WE RAISED JUST THE RESIDENTIAL RATE. SO THE RESIDENTIAL RATE INCREASED BY $10.

I ALSO WAS TAKING A LOOK AT SOME OF OUR COMPARABLE CITIES, AND I NOTICED THAT OUR FEES ARE CONSIDERABLY LOWER THAN OUR NEIGHBORS. FOR INSTANCE, POINT BEACH IS PAYING $365. POMPANO IS PAYING $361. DEERFIELD IS PAYING $308. Fort Lauderdale it goes up to 365 we're actually lower than Coral Springs and West Palm Beach so that's just something I found interesting do you want me to continue with other questions yeah I should have asked that I think it makes sense for all of us if we can to just knock out all our questions one by one okay we'll go down the line and keep them going go ahead okay I'm going through the regular general fund budget on page 75 just wanted to ask about the non-divisional non-divisional contributions and i see that there's an increase of 2.9 million from the prior year um i just wanted to see where that came from and is this like from the non-profit contributions themselves and if the non-profits do they fall under other operating just give me a moment as i try to find the exact figure you're yeah trying to It's at the very bottom of the page. What page did you say? I think I was page 75.

so i'm not seeing that um i do see on page 76 there's a reduction in non-divisional by about 2.8 million dollars it might be off one page when i scanned it but yeah i don't see an increase that's what i'm struggling to see non-divisional overall is down

It's down $2.8 million. I just wanted to know, can you explain what that difference is? Is that coming from non-profit grants?

No. For the non-profit grants, what we typically do for the non-profit grant is for the proposed budget, we have the same amount as in the previous year, and that's around 500,000. I can give you the exact figure. And then for the final budget hearing, council usually spends majority of that discussing who gets awards for that. And that number could go up or down depending on what you decide. So so that's still in there. The the main driver, as you can see on that page 76, there are decreases overall, but the largest decrease is 2.4 million decrease in transfers out. And again, that is we this is where we budget our transfer to beautification. and that is being slightly offset by or not slightly but being offset by 2.5 million dollars in the increase for transfer out to cip so we are restructuring the revenue for those utility revenue sources and moving it from cip and beautification to general fund and then

increasing a transfer to cip to still fund cip in the same level okay all right thank you um i just had some general questions about our recreation um nothing related specifically to any line on the budget but i would like to know what recreational programs and facilities recover their costs through fees and which ones are the heavily most subsidized programs I would also like to get a breakout of the library divisions budget and cost per hour by branch. And what are the lowest traffic hours? Could they be adjusted before any reduction in any programming? So as far as beautification, now that that fund is being moved to public works, is there a place where we can see total citywide landscaping beautification spending all in one place?

on page 151 i wanted to ask about the one million dollar subsidy for economic development was this fund eliminated no the fund wasn't eliminated the funding into the fund was eliminated in this budget and that's because there's about five million dollars in that fund it didn't we didn't see a need to put more money into that fund right now okay Can I answer one of your other questions or mayor would you rather have us wait?

No, go ahead And either way it sounded like she was the questions were like at some point. Can I have an answer? It's not like right this second.

I just didn't know if anyone had that answer Yeah, okay.

There is a beautification division in Public Works and engineering now So there would be one division we can look at and clearly see all of the beautification costs

Um, on page 19, the office of emergency management budget was eliminated. And I just wanted to know if that, is that a real elimination or is that some place where those responsibilities sit now that's moved to fire rescue and they'll have a division for emergency management, fire rescue. Okay. Um, city management, city manager, I may know had fallen, but where did those positions when they were eliminated, who absorbed that work?

That's a, ouch.

Two come to mind. We, you know, that, those responsibilities were distributed. Deputy Manager Lukasik assumed oversight over development services and the CRA. And I guess you already had economic development. Am I missing?

No, you're correct. So I assume responsibility for recreational services, development services, and CRA. I did have economic development.

So human resources, information technology, report to me now. So I picked up those pieces. And then communications and public affairs, legislative, that was assumed into our division of public affairs.

Thank you. Moving on to the capital improvement program. I wanted to ask about the Jeffrey Street Railroad crossing because in the prior budget we had budgeted $15 million and now I see in 2026-27 budget it increased to $20 million. It went from $15 to $20. So I just wanted to ask what accounted for those increasing costs?

Yeah, thank you. Thank you so much, Deputy Mayor Grau. Zach Beer again, Public Works and Engineering Director. It was two factors. One was we had that discussion with the Beach and Park District, and they're going to be building the skate park. And so the city assumed the construction responsibilities of the underpass. So as part of the Jeffrey Street build out, that's the section of Jeffrey Street between 2nd Avenue and the FEC tracks. There's going to be a continuous underpass where people can traverse from the north side of North Park to the south side on a nice low slope facility to make sure we connect those two parks. Then the other part of it was just an interesting thing that happens as part of design and construction. So we found out there are not only three tracks with the FEC, but one of those is a service track that they use for safety measures when the track gets out of control. And it's actually six inches lower than the other two tracks. So in the math and engineering side, that can be an interesting endeavor to solve that from an engineering challenge because it has to go back 2,000 feet on either side. So in order to navigate that, that's part of the budget too. So it was a, through the design process, we discovered that, and then it's also the portion for the underpass.

Okay, thank you. The other thing with the, on page 80 with Memorial Park, I see that the funding source is coming from land proceeds fund. Would it make sense for us to use some of the CRA money for that?

Yes. So once we know what it is, as long as we can qualify it under the CRA statute, I think my preference would be to use CRA money first. So that's just a designation in the budget now. We will be watching for that. I appreciate you bringing it up.

Thank you. I know we had this conversation about the internal audit department. Our city, I guess, has now combined the compliance under the CFO. And I believe that if we're really serious about reducing costs and improving accountability, I believe we need to ensure that this function is truly independent. and for we we definitely need a dedicated internal auditor or have this outsourced to a independent external audit firm having an internal auditor can really help test whether departments are following city policies and laws it will operate help with operational efficiencies audit findings they make recommendations to see and then they follow up and make sure that the problems are corrected I would just like to have some discussion with my colleagues because other cities such as Delray Beach has an internal auditor and they report exclusively to city commissioners. And I just believe that that would be important to find the problems before they become bigger issues.

I appreciate that Deputy Mayor Graf. If you're asking for feedback right now, I'd have to look into it, think about it, get some data, probably talk to staff about it. I do think it's a worthwhile thing to think about. But at the moment, I'm not in a position to say one way or the other.

Okay, thank you. Just one more thing. In my own business, we've been using AI quite a bit and for a number of ways to save time and efficiency. For example, like AI tools can really assist with tasks such as footing, you know, our audit reports, what used to take like hours has now taken like 10 minutes. And so I just like to see if given the fiscal pressures of the city, we might face when the property taxes, I believe the state should actively be evaluating how AI can be used responsibly to reduce costs. So I just went ahead and came up with a couple items, like for instance, reviewing lengthy contracts, agenda material, footing and checking budget documents, identifying inconsistencies across budget documents, assisting with grant research, grant support, streamlining public records, and improving customer service response times, automated routine tasks, flagging unusual trends, things like that. But that also leads me to another question is, are we using does the city have an acceptable public use retention policy and if not then i think we need to look into getting one thank you all right all very good points

I think can I just answer the fire assessment. 2022 was the last time we raise the rate and that was the residential rate went from 1.45 to 1.55 and all the other rates went. Went up a little bit also.

OK, this truck or any questions.

Just a couple, really. First, thank you to staff for putting this together. I know it was like a lot of work before our September meeting. We should get this much later. I had a question more for Mr. Zervas. When you said earlier, because we know we're working with SEIU on the collective bargaining agreement for that group of individuals, the number that you used here is the proposed number from us? like from the compensation study the 30 it's you're going off of because nothing's been agreed on correct and you can't say no i can answer your question appreciate it um yes what we've included in the budget reflects everything that we have offered to sciu okay and then just as a follow-up uh when are we are you all meeting with sciu to go over their their demands

I'll have Mr. Zervas look that up, but I believe our next meeting is either, it's in the month of June, next week or the following week, and he'll confirm the actual date.

And maybe I use the word demands. We're working together with SEIU, and I've had the opportunity to sit with the SEIU members, and we're trying to work on a solution with what we offer and what they are negotiating. So maybe that's a better word of saying, and we're trying to work really hard to get those people up to date with SEIU. some of the compensations and some of the request is a better word councilmember Drucker the the next collective bargaining schedule meeting is scheduled for June 30th okay so when June 30th is a day okay so whenever that happens if we can possibly get an update hopefully by the time we meet it as a body in July we'll have an update on that so that number included that okay good my other question I've had some very, very preliminary conversations with fire, with our police union president earlier today about fire assessment. I'll be meeting with him offline. Again, the community, the business community, I've looked at the numbers. some of the smaller businesses will benefit if we increase it on the residential side. Of course, there's two sides. I'm sure the Chamber will come and give some feedback as well. So this is the opportunity putting out there to all the members and to come and give us that information. So in my preliminary just kind of talking to some folks. Um, I see some support coming from the fire department community, meaning the, the, the union area. And as deputy mayor mentioned, uh, growl, our fire assessment fee is one of the lowest, just like our millage rate is as well. So that was my other thing. Um, and then I asked this every year and I'm sure everyone gave this, um, we've looked at open positions and that were staffed, um, adequately. for our departments to make sure that we have, everyone has given their input as to if open positions have been opened, they're eliminated, which we did last year, but if there's any other positions besides the ones that we saw today, that those have already been addressed.

Yes. So open positions were all reviewed and several were eliminated. There were quite a few requests for new positions that didn't make it into this budget proposal in order for us to balance the budget. So the ones that are included are the ones of the highest priority.

and where any of those positions have an impact to the quality of service we provide, not only to our residents, but to our business community.

so i think as our community continues to grow right the demands on staff continue to grow and if we don't add positions it puts stresses on those service levels i didn't see we evaluated the requests and didn't see anything in there that that if not approved would degrade the service level but over time If those positions aren't added over time, if there aren't other efficiencies through AI or other innovations or other ways to meet that demand, that will build. But the answer to your question is no. I believe where we've added are those areas of criticality that you're referring to.

Perfect. Thank you. Those are all my questions, Mayor Thompson.

OK, thank you. I want to I'll just take my opportunity now to express my appreciation to staff for this. You know, normally this is happening where discussions are happening later than this. And I appreciate you all putting together The resources you did to have this discussion now is much appreciated. I have had many discussions and I've had many questions answered by staff already. I will continue to over the next few months, so I don't have any questions at this moment. We'll go to my left, Mr. Perlman.

Mr. Thompson, one question about Ms. Grau was speaking about bringing in an internal auditor. Mr. Zervas and Mr. Zohaney, could you please, and also Ms. Grau, if you have any further thoughts, but How do you see that if we decided to move forward with that? How does that work and what what are we what are what is gonna come? What is gonna be revealed from that and are you familiar at all with that process? I

Councilmember Perlman, there were several questions there, so let me try to parse them out. First of all, the internal audit function wasn't combined with the compliance department. We don't have a department for either one of those things. What we do have is we have an internal compliance and audit function, a division within the finance department. And that is, it doesn't function in the traditional internal auditor function where there is independence and it is reporting to a third party entity. And I think that's what Deputy McGraw is referring to. Totally understand that. We use the internal audit and compliance function. They do a number of things within the city. We do use them to do types of internal audits. So I can give some examples. We routinely audit petty cash funds across the city. We routinely audit P-card transactions across the city because they tend to be higher risk transactions. That's more of a traditional internal audit function. So we do a little bit of that. But we also use them to do a lot of internal analysis. There was a time recently where I was noticing some irregularities in some of the revenue streams. Well, I asked the internal audit to look in, make sure our billing system is calculating properly, that the code's getting coded correctly in the general ledger account, things like that. And they do an excellent job at all those things. They also do a lot of other finance work. They help with our audited financial statements in the audit. So there's a number of other things they do. So what I'm telling is the city doesn't have a dedicated internal audit department or internal auditor in that function. Well, I can't answer for you is what the outcome would be if we did. I don't know that. If you wanted a dedicated internal audit function, we could look at how to structure that in a way that either reports to the city council or reports to the financial advisory board who is independent and oversees the city's external audit functions. So that's one way to approach that. There is an increased cost of that because that's not a role that we have right now. So whether we hire someone or we utilize an outside accounting firm to perform those types of analysis, We would do it typically what an internal audit function does is they come up with an audit work plan, like a scope of based on a risk based analysis of areas of the city that they're going to look for compliance in. And then, you know, the the overseeing group approves the audit work plan and over the scope they do those audits and then they report those results back to that that body whether it's the fab or the city so that's generally what it looks like there would be some cost to that but there could be some savings that deter that's that's identified in the process we would be happy to look at that if that's something the council would desire how it gets structured within the legal parameters of the city as an organization, we'd have to work with the city attorney's office to make sure that all of that's done properly.

All right, Mr. Perlman, any more questions?

You spent most of our time talking about how we're going to spend, but we spent little time

Why don't you hit that microphone? All right.

Today, we've spent most of our time talking about how we're going to spend, but we're not talking about how we're going to cut. Mary, can we pull up the slides, please? In the last couple weeks, the biggest discussion about cuts was Given in this presentation last week in which a scatter shot approach across the board was provided. Taking cuts proportionally off of these various operating departments and actually when you look at it, the biggest cuts are coming from police services and fire rescue services. Which I don't think anybody would argue are probably the most or at the top of the most essential services of the city. At some point, is anybody here willing to come forward and make the tough decisions on behalf of the taxpayers? I'd like someone to please explain the wisdom here of making these across the board cuts instead of strategically making decisions to benefit the taxpayers the most. Because this tax amendment bill is coming and we have to be ready for that and we have to protect the taxpayers. So right now, families across Boca Raton are making these tough decisions right now, and we need to be responsible enough to make those same decisions as well for the benefit of the taxpayers. We need to start examining the budget across the board, including and especially the CIP budget, and thinking about what are the nice-to-haves and what are the have-to-haves. We need to make responsible investments, responsible cuts, and responsible spending. And we need accountability to the taxpayer. A great deal of focus this week and last week has been on the general fund. But when you examine the documents that were put forward to us today, that's not where the real cost is. The operating expenses of the city are relatively stable over the next couple of years. We need to be looking at the other funds for which there is an extraordinary plan to deplete these fund balances by hundreds of millions of dollars. This is where we need to be focusing. And we're looking at Again, the general fund and that's where this focus has been recently and it's distracting from what's going on with the CIP plan and it's actually very similar to what was happening with Memorial Park because over the last couple months since this new council came on board Many of the staff, most, almost all of the staff, I would say all of the staff presentations in those initial meetings were centered around Memorial Park, getting a task force, bringing in Treasure Coast Regional Planning, but nobody was talking about the police station at that time, which is where the real cost was. People have spoken today saying that there was no plan, that the plans that ADG drew up were not for a $190 million station, but that's not true. ADG was commissioned, they were paid the money, and the city of Boca was provided. a plan for a $190 million station.

Mr. Perlman, I had asked if this were, if you had questions. I've heard a bunch of sentences, but I haven't heard any questions. Could you get to the questions, please?

We're in number four, the budget discussion. Are we not? We are. And this is the time where we've set aside to ask questions of staff.

This is the speech time can come later. I want to get to public comment before we do the speeches, if you don't mind. So if you have questions, now's the time. We can come back to the speeches, your speech later. Okay. All right. So your questions, please.

Yeah. So... Just one clarification. I'll finish this later. Thank you, Mr. Thompson. Can you please pull up, just to clarify, page 8 of the presentation. There's a difference in ad valorem taxes between the approved budget fiscal year 25-26, proposed budget fiscal year 26-27. So... Is the difference in ad valorem taxes from 26 to 27 the difference between these top two numbers or is it less than that? Because on another slide it was significantly less.

That's correct. Those are the ad valorem amounts for the general fund. So it's not the full amount of ad valorem because some of that is also allocated to CIP. But if you want to know the difference between the two years is that we would be expecting if we kept the same millage rate, it would be 8.2 million that we would be receiving 8.2 million more than last year, which is allocated partially to general fund and a little bit to the capital improvement fund.

Okay, so 8.2 million. Assuming we proceed with the proposed millage rate, we'll have an increase in ad valorem taxes of 8.2 million from 26 to 27. That's correct, right?

Yeah, and I just want to Okay, can you go to slide 17? Just for clarity, what you see on this is the total citywide. So the 11,459,400 is citywide. That also includes an increase in the CRA of 3.3 million. So that's why I say 8.2 and 3.3 is CRA.

thank you just for clarification i believe the 8.2 million also includes taxes on new construction it's not in the same tax base from the prior year that's an important distinction that's correct i'd also want to point out that in fy27 we are moving previously we budgeted 1 million of our ad valorem to economic development and then mr service mentioned this earlier in fy27 we are moving that back to general fund in part because they have a healthy fund balance and we didn't feel like they needed that, but that is also going to flow through that difference. I think we're showing around 9 million in just ad valorem to ad valorem in the general fund between FY26 and FY27.

Great. Any further questions, Mr. Perlman?

Not at this time. Thank you.

Thank you. Ms. Sibyl.

I will have more questions in the future after we have some more time to digest this. But I was curious as to why there was such a significant decrease in the CDBG and the SHIP funds. I know they come from the state, but there is a significant decrease in them.

We can follow up with that from talking to staff who have expertise in that. But we get those numbers directly from the folks who manage those funds.

All right. I mean, the Housing Assist Trust is down 79.4%. That helps people stay in their homes or repair their homes or... a lot of other things. It just seems like it's gone down a lot when people need the help the most. So I'm just curious as to why.

Sounds like they'll follow up on that. Ms. Sippel, do you have any other questions?

At this time, no. Okay.

Then we will come back for the speeches, but I think before then we can do some public comment. Now is the opportunity for any members of the public to give us their views on the budget discussion that just is happening now and will be happening over the next few months. So anybody who's interested, if you can please come to the podium, state your name and address for the record and you have up to three minutes. I do have one card and they will go first. That card belongs to Andrea Levine O'Rourke. Please step on up.

Good afternoon, Mayor and Council members and staff. I'm Andrew Levine O'Rourke. I live at 100 Southeast Fifth Avenue, former City Council member, resident of Boca Raton since 1979, and I continue to advocate for issues that I feel are important. and often not discussed. Regarding the budget and or as we prepare for the potential fiscal impacts of the Florida's proposed tax reform, I understand the difficult budget discussions are important. Every department, every program, every expenditure examined through the lens of necessity and return on investment. Today, I will simply ask that arts and culture not be viewed as an optional amenity, but as an essential asset that contribute directly to the economic vitality and quality of life that are essential part of the civic infrastructure of our community. When people think of art and culture, they often think first about paintings, performances, concerts, festivals, our history, and public art. What they may not immediately think about is the economic impacts. Yes, art and culture are proven economic drivers. They bring visitors to our city who dine in our restaurants, stay in our hotels, shop in our stores, visit our museums, and support our local businesses. They generate economic activity that extends beyond the initial investment. Just as importantly, arts and culture helps create the unique sense of place. It transforms public spaces into gathering places. It brings neighbors together. It creates experiences that foster civic pride, helps us remember where we started, and strengthens community connections. Quality of life matters. Vibrant cultural programming, public art, festivals, music, community events, are among the factors that influence where people choose to live, work, play, invest, where they spend their time, and where they spend their money. Arts and culture also contribute to something that cannot always be measured on a balance sheet, community well-being. They inspire creativity, encourage social connection, reduce isolation, and help build a stronger and more engaged citizenry. It is one of the few things that we experience together. Not on our phones, but in real time. So what's that worth? The question before us should not simply be what art and culture cost, but the more important question is what and how does it give back? As you navigate through the future budget decisions, whether we are forced to the tax reform or not, I encourage you to view investments in art and culture not as discretionary spending, but as an investment in Boca Raton's economic prosperity, identity, and quality of life. I actually believe we should be adding a Department of Cultural Affairs, which most cities of our stature have. And if I had more time, which I just have 10 seconds, I would also address our nonprofit grants. Don't give that up. The nonprofits are the heart and soul of our community. The support from our city is very important to them. And I thank you for your time and for your hard work.

Thank you, Ms. O'Rourke. Next card I have is Joanna Marie Kaye.

Good afternoon, I am Joanna Marie Kay, 6325 Las Flores Drive. I'm also Executive Director of Festival of the Arts Boca, and I want to thank you, Mayor, City Council members, and completed a successful 20th season, and support from the city is critical to our success. I urge you to continue that support. The festival is an economic driver for the community, and by presenting world-class performers and authors, the festival also puts a global spotlight on our city and makes Boca Raton a destination. We're currently in the planning stages for 2027, but we're unable to enter into artist contracts until we know if the city's support will continue at the same level that it has been for the past five years. i understand there's no answer today but if somebody could please reach out to me and let me know when we can expect that answer that would be very helpful because right now we are at a standstill and we would really like to move forward for the city thank you very much thank you mr k next up is brianna hagquist

brian headquist 5710a coach house circle and again with me are my friends thaddeus and ted the endangered gopher tortoises representing parks green space and especially wildlife i have more of a question i would like an explanation of how the funding works between the greater boker tone parks and recreation district and the city of boca example sugar sand park the sign in the front says greater broker atone parks and and recreation there's funding from the city and the parks district and the same with several other parks and i don't quite understand how it works and who who pays for what and why it can't be one or the other and what's going on And especially with the resolutions that we just finally finished off with, both of them trying to destroy Sugar Sand Park, but we saved it. And I would like an explanation of how the whole thing works. And these guys, especially wildlife, it's their home. They would really like to know. Thank you.

Thank you, Ms. Hadquist. At one point, the answer was perhaps more simple than it is now. It's a little bit more complicated. But we'll have somebody from staff get back to you on that. Those are all the cards I have. But if anyone would like to provide public comment, now is the chance. Mr. Liebelson, go ahead.

Mike Liebelson, 398 Northeast, Third Court. I just want to talk about overall property tax ad valorem collections by the city and how they've been in excess of population growth and inflation, as well as the same thing with expenditures. They've been significantly in excess of population growth and inflation over the last four years, FY 2022 to 2025. Our population growth over that time period has gone up by 2%. Cumulative inflation is 9.4%. Yet our property tax collections have gone up by 49.4% or $46.8 million per year over that period. Our general fund expenditures have gone up by 26% or $51 million per year over that period. Again, that's with a 2% population growth and 9.4% inflation. So where is this excess spending going? We're spending $28 million per year in excess spending above population growth and inflation. we're collecting 36 million dollars per year in excess of population growth and inflation and by the way these numbers are you know dwarf whatever is coming out of tallahassee in terms of our exposure of eight million dollars i think it is to 16 million dollars out of the property tax relief I went through, I downloaded the budget documents. I think it's an excellent preparation and presentation by our staff and by our CFO Jim Service. But a couple of comments. It is not possible for the public to digest this 300 pages and make decisions or establish priorities. I don't think it's possible for the council to do that without getting into extreme granularity over each particular project, each particular expenditure. I think what this council can do is they can direct the city manager, who is responsible for our budget, as the CEO of our city, to say, find cuts, find a way to keep our expenditure growth equal to population growth plus inflation, find a way to keep our tax collections equal to that. It's only the city manager and his staff that can get into that granularity. We can't do it as a public... This council can't do it. I don't see how you have the time or capabilities or ability to do that. The second thing I'd like to say is just the way we present our capital projects. We do it one year at a time. We have a $230 million five-year number one expenditure to deal with these forever chemicals with respect to our water treatment. We need to look at these things over five years. We can't just look at 2027. The other thing.

Mr. Liebelson, please conclude.

Okay. The other thing we should not be doing is we need to stop with the engineering consultants and work with EPC contractors who do the engineering as well. It'll be faster and better for us.

We appreciate your comments, Mr. Liebelson. Who's next?

john anderson 290 west palmetto um the scope of the cra it doesn't when i read online what a cra is the florida statute it doesn't it doesn't seem to apply to boca there's no blight or um industrial industry that's not not in existence for 100 years i think we should get rid of the cra Also, there can be nine members. We should also attack the beach district. They've never done. I want more boat ramps. I hear about balls. I hear about not for profits. I hear about all these kids. I want more boat ramps. I want access to the ocean. I want to people that enjoy that want more access. The city sold us out to the Bogo Hotel. and gave that land because people at the boat docks might be a sore eye also the city manager thing it says 70 million 57 million to 70 million and then there's like a 9 million i would like a better definition or summary of scope i only read the exhibits online i did learn there's a book maybe it's in there um And then the thing John was going on about the depletion of the stuff. If I go back to 2008, the city's into privatizing everything. They want to privatize the police, sanitation, the fire department, the paramedics. And then with the fire assessment, it just means you're not budgeting the money. If the scat no good singer can spend 70 million to tell people to come from New York City to come down here, what they already know. If anyone's been in New York City in the winter, they know to come to Florida.

Thank you, Mr. Anderson. Anyone else? Mr. Rungin.

I don't believe it was 70 million. It was 70,000. It was 70,000.

Never was.

Jonathan Nungian, 6501 Congress Avenue. So just want to make two quick points. I know Save Boga ran on overdevelopment, stopping overdevelopment. I've heard from Mr. Liebelson twice that our city's grown at a rate of 2% over the last five years. Pretty sure that's not really overdevelopment. But what I think we need to do is look forward. So to the second point I wanna make is, it's great, any business owner knows, it's great to cut your budget, but you have to grow your revenues. And all we hear is stopping development, stopping development, stopping over development. May have seen the news yesterday. Maybe there's a purchase that's gonna happen in this part of town. We need to look forward to where it makes sense in this town where previous councils haven't enabled staff significantly enough to study areas of this town that we should be developing, not necessarily in the downtown that we've overdeveloped. So that's the point I want to make as you're looking at the budget cut. where you need to cut, but let's actually talk about moving forward. Let's have a strategic plan going forward where we can grow revenues in this town, because any business owner knows cutting is great, but grow revenues. Thank you.

Thank you, Mr. Rungeon. Anyone else for public comment? Mr. Bill.

Martin Bell, 761 Southwest 3rd Street. Speaking of real estate, I know that we're in negotiations with Collier's, and you might not be able to say anything, but is it a good time to be engaging in purchasing any kind of real estate? And if it happens to be maybe a pocket park, we already have a good candidate at the base building. That's an excess asset. And that would be a low cost and a high value return to the citizens. We can make that into a dog park and attract people from downtown. So more green, as I've said, is good. I want to compliment the city on going after the Boca El Real trail. I actually rode that into the meeting today. It's very nice, and the underpass under I-95 in Yamato, that's great. That's another example of low cost, high impact, high value. We should focus on those types of projects. I think that I looked at the Capital Improvements Program document, And there's 150 million in there tied to a bond for Memorial Park. I think that's a little bit dangerous to put that out there. That's inaccurate. That sounds like terror Frisbee version 2.0. There's a bunch of junk in there that has nothing that doesn't reflect reality. In comparison, Hillsboro, Boca Real South cost about $8 million. Brand new park, one of the most popular parks in the city. Wildflower, 11 million. have a new city hall and and i'm looking at the description we're talking about the city hall assets and we have a new city hall we have 70 000 square feet of new office space take out the base building from the downtown we have 50 000 excess if anything we need to perhaps consider knocking down the multi-level section of the city hall and uh just use the historic um single level structure to the north at the city hall building historic building um so the number 150 million is reasonable if you divide it by three and we shouldn't have to get a bond we should use the land proceeds fund plus the cra that ms grau had mentioned we have the money so that should be sufficient um Another thing, too, is that maybe the economic development, we shouldn't be giving away money to public companies. We subsidized a public company. We pledged money to a public company earlier this year. was in town actually as a vendor of fau they were paid to be here we need to focus on creating an environment a macro environment where companies want to come here let them pay fair value let them hire their own people let's focus on the macro let's not burn up any precious dollars uh on uh subsidizing public companies one last quick question and i'll wrap up Thank you for considering new construction reassessments in this updated version of your tax presentation. Quick question. 10 days ago, we saw a deficit of 16.7 million over two years. Where are we today? Are we now at plus 8.2? Are we being offset by the new construction reassessments? I'd like a clarification on that. Thank you.

Thank you, Mr. Bill. Anyone else? Public comment. Last call for public comment relating to our budget. We will close the time for public comment. And I know the city manager and members of our staff were taking down the questions that were asked. We'll have people get back to those who asked them. So before we adjourn, I think I'd set aside some time for Mr. Perlman to finish his remarks. So go on ahead, Mr. Perlman.

Can we get the presentation up, please? Thank you. As I was saying, a great deal of the focus this week and last week has been on the general fund, but that's not where the real cost is. The operating expenses of the city are relatively stable over the next couple of years. But we need to be looking at the other funds because there is a plan to deplete these fund balances by hundreds of millions. And this is where we need to be focusing to strategically make the best decisions on behalf of the taxpayers to figure out what would be nice to have and what do we have to have. So this is a slide from today's presentation. So the actual, this is for the capital outlay. So in 2025, the capital outlay was 27 million roughly. In 2026, which we didn't discuss today. We only addressed 2027. The 2026 budget has already been approved by the prior council. They have the capital outlay for 2026 at 331.9 million. That's 12 times the actual capital outlay in 2025, more than 300 million. then in 2027 we have a capital outlay of that the staff is seeking approval of for an additional 243.7 million that's nine times the 2025 expenditures the total of those two proposed years of capital outlay is 575 million dollars And this figure doesn't even include the $125 million bond for the $120 million police station. And it doesn't include the $150 million bond for the Memorial Park facilities that the city intends to issue. That's another $270 million. So now when you look at this and you add in that, now we're at $845 million. And by the time those projects get started, the city hall, the police station, the community center, it's very likely that we're going to be at close to a billion dollars or maybe even more than a billion dollars. This was another slide from the presentation today. Thinking about the numbers on this previous slide, 575 million, and then coming to this, when you look at this and you total this up, this is 115 million. This seems a lot more palatable, but it's misleading because This is only a small fraction of what's been approved for 2026 and what the city is seeking approval for 2027. And again, this is not even looking at 2026, this is 2027. So we need to bear that in mind. This again is from today's presentation As you can see highlighted in the bottom, this is revenue source. So from reserves in 2026, which has already been approved, there's a plan to withdraw $235 million of reserves. For 2027, which is on the table for approval now, that would include a plan for the withdrawal of 166 million of reserves. That's a depletion of reserves of over 400 million. This is a spreadsheet that the financial department prepared. having to do with my discussions with mr zervas and what this is is it shows the fund balances of all the all the city funds and again the presentations uh this week and last week were primarily focused on the general fund which didn't take into account the many other funds across the city which is from which the depletion of these funds and these fund balances is going to fuel this 575 million dollar proposed plan of expenditures. On the upper left, you can see that across the top line is the fund balance at the end of 2025, at the end of last year. And then the bottom line would be the fund balance, assuming that all of these $575 million of expenditures were actualized. I'm going to flip to the next slide, which will show the total across all the funds. But you can see here that the general fund From the top line is $95.9 million, and then the bottom line is $89.8 million. So the fund balance declines approximately by $6 million. However, on the right, this is the total of all of the funds across the entire city, again, which are fueling this extraordinary outlay of $575 million, which potentially is the plan is to potentially expend that within two years that's that's what's been approved whether it's done or not i mean maybe it won't be but but what we would be approving would be that for the potential to expend that amount 575 million in two years and if that's done as you can see right now Right now, the fund balances of all the funds is $711.8 million. If that plan is actualized, the fund balance will, of all the funds across the city, will decline to $415.9 million. So that's, across the city's funds, the plan over the next two years has the city's fund balance decreasing by $295 million. Mind you, this is the plan that we have while simultaneously the state is putting on the tax reform amendment coming up, which is going to significantly decrease funds to the city. Meanwhile, we have a plan depleting this extraordinary amount of our rainy day funds. The amount of money coming in is gonna look, it could look very different this time next year and in the next 10 years. And this plan is not being mindful of that. Just to continue spending or depleting these rainy day funds is irresponsible given what's going on with the property tax amendment. We talked a lot about the future of this city and protecting it for the next generation. We don't seem to be considering this next thing that's coming down the line. We need to be thinking about protecting the taxpayers. We need to be thinking about being mindful of wasteful spending. And we need to be thinking about being thoughtful about planning for our city's future. We need to make sure that the taxpayers are protected. We have to be cognizant and plan for the future. And that is why we were sent here, and we need to do our jobs. Thank you.

i believe that concludes our discussion on as part of our special workshop meeting on june 18 2026 so the time is now 3 30 p.m and i will adjourn this meeting at that time thank you everybody see you all soon